Energy‐related financial literacy and electricity consumption: Survey‐based evidence from Finland

Abstract

AbstractWe provide new insights into (i) the level of energy‐related financial literacy in Finnish households, (ii) the sociodemographic characteristics that affect energy‐related financial literacy, and (iii) whether energy‐related financial literacy influences household electricity consumption. We use a data set consisting of energy‐related financial literacy questions combined with monthly electricity consumption data. We draw from the recent literature on energy‐related financial literacy and suggest two new variables based on subjective perceptions on energy‐related financial literacy. Gender has a strong association with energy‐related financial literacy. Our results also indicate that households of respondents with higher levels of energy‐related financial literacy tend to consume less electricity when we control for other factors such as dwelling and household characteristics. This implies that measures to promote energy‐related financial literacy might guide consumers' decisions toward energy efficiency and conservation.